» Posted by Martin Weil on December 29, 2007

I don't have the time to read as much as I once did. But I can wholeheartedly recommend the following as the two books that left the deepest impression on me in 2007:

Prophet of Innovation is the biography of the great 20th century economist, Joseph Schumpeter. Overshadowed by his contemporary, John Maynard Keynes, Schumpeter was a bold thinker and fascinating man. A plus for me was the perspective the book offered on US and European history in the post-WWI period.

The Paradox of Choice (subtitle "Why More is Less") sounds at first like a throwback to the 1960's and the back-to-basics movement. It is anything but. Author and social scientist Barry Schwartz makes a powerful argument that individuals in our contemporary consumer society are increasingly dissatisfied with their lives due to an overabundance of options. His thesis has important investment as well as consumer and lifestyle implications.

» Posted by Martin Weil on December 27, 2007

Each year, MW Investment Strategy Group has made year-end contributions to a variety of charitable causes as part of a commitment to give something back to the community. In the past, we have contributed to America's Second Harvest, the American Red Cross, Doctors without Borders, and Habitat for Humanity among others.

While still personally supportive of these excellent organizations, this year I am using our entire company charitable budget - as well as the money saved by not sending out a holiday card in 2007 - to fund an account at Kiva, a US nonprofit that provides micro-loans to individual entrepreneurs in developing nations. If you are interested, you can view my portfolio of micro-loans to date here.

» Posted by Martin Weil on December 26, 2007

Blogger Eric de Place calculates that, for a typical driver, switching from an SUV that gets 16 MPG to a car that gets just 23 MPG (difference 7 MPG) will save twice as much gas each year as if a compact car driver getting 32 MPG switches to a Prius getting 47 MPG (difference 15 MPG). This counterintuitive result is a function of the curve shown below. Note that the steepest part of the curve (where the most gas is saved) occurs in the 5-20 MPG range.

Moral of the story: Environmentalists should forget hybrids and put their efforts on getting people out of their gas-guzzling SUV's and into Camrys, or even Cadillacs.

» Posted by Martin Weil on December 18, 2007

The Financial Times' John Dizard offers this good overview of the current state of the Central Bank efforts to drag the global economy away from the precipice, with a ps. regarding Goldman Sachs' attempt to insure itself against a major collapse of the banking system. Warning: article is suitable for the economics-minded only.

» Posted by Martin Weil on December 17, 2007

Are we? Or aren't we? That is the question the Times posed to six eminent experts in Sunday's paper. The six come to nearly a divided opinion as to whather the US is already in recession. Those who say not however believe the risk is high for one to commence in 2008.

"Just for fun," the blog Calculated Risk digs up a few historical quotes from former Fed Chairman Alan Greenspan, and notes that the last US recession began officially in July 1990.

In the very near term there's little evidence that I can see to suggest the economy is tilting over [into recession]. Greenspan, July 1990

...those who argue that we are already in a recession I think are reasonably certain to be wrong. Greenspan, August 1990

... the economy has not yet slipped into recession. Greenspan, October 1990

» Posted by Martin Weil on December 13, 2007

Stockton real estate broker Cesar Dias has launched the RepoBus, a van that carries prospective buyers to foreclosed homes in a city that has one of the highest foreclosure rates in the state.

The LA Times has the full story

» Posted by Martin Weil on December 10, 2007

The fact housing was something of a bubble was not hidden. A lot of people, including me, have been saying that the country has been spending more than it's been producing and that can't go on indefinitely, and that will have to come to an end. And the question is, does it come to an end with a bang or whimper? And we're testing that proposition.

The former Chairman of the Federal Reserve reflects on the current credit meltdown as compared to the Latin America debt crisis of 1982 in a Wall Street Journal interview (subscription required)

» Posted by Martin Weil on December 05, 2007

Focus on effort, not intelligence or ability, according to this study from Scientific American.

» Posted by Martin Weil on December 02, 2007

Debt. And a lot of it bad.

From the NY Times

NARVIK, Norway -- At this time of year, the sun does not rise at all this far north of the Arctic Circle. But Karen Margrethe Kuvaas says she has not been able to sleep well for days.

What is keeping her awake are the far-reaching ripple effects of the troubled housing market in sunny Florida, California and other parts of the United States.

Ms. Kuvaas is the mayor of Narvik, a remote seaport where the season's perpetual gloom deepened even further in recent days after news that the town -- along with three other Norwegian municipalities -- had lost about $64 million, and potentially much more, in complex securities investments that went sour.

"I think about it every minute," Ms. Kuvaas, 60, said in an interview, her manner polite but harried. "Because of this, we can't focus on things that matter, like schools or care for the elderly."

Norway's unlucky towns are the latest victims -- and perhaps the least likely ones so far -- of the credit crisis that began last summer in the American subprime mortgage market and has spread to the farthest reaches of the world, causing untold losses and sowing fears about the global economy.

Used to be places like Argentina that defaulted on its loans from other nations.

» Posted by Martin Weil on December 01, 2007

The State of Florida, according to Bloomberg, has a big problem on its hands.

School districts, counties and cities across Florida are scrambling to raise cash after being denied access to their deposits in a $15 billion state-run investment fund.

Florida's State Board of Administration, manager of the Local Government Investment Pool, halted withdrawals yesterday at an emergency meeting after $12 billion was pulled out this month from participants. Governments from Orange County, home of Disney World, to Pompano Beach asked for their money back following disclosures that the fund held $1.5 billion of downgraded and defaulted debt.

"The unthinkable and the unimaginable have just happened here in Florida," said Hal Wilson, chief financial officer of the Jefferson County school district, which kept its entire $2.7 million of cash in the fund. What we just experienced here is a classic run-on-the bank meltdown."

Marketwatch is reporting similar problems in Montana.